Macrowikinomics: Opening the Kimono on Climate Change

This article is the third installment in series to be written by Don Tapscott and Anthony D. Williams, authors of the newly released book Macrowikinomics: Rebooting Business and the World. Mark Parker, the CEO of Nike calls it "A masterpiece. An iconic and defining book for our times." The Economist says it's a Schumpeterian story of creative Destruction."

The book argues that many of the institutions of the industrial age have finally come to the end of their lifecycle, and now being reinvented around a new set of principles and a networked model.

Today's blog is about climate change.

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In an economic and political environment where progress on global warming seems to have ground to a halt, climate change advocates in America are wondering how to move forward. A Republican-controlled House surely spells doom for climate change legislation and other measures that could stimulate the green economy. But those who support taking action on climate change should not be discouraged. Around the world there are already hundreds, and probably thousands, of collaborations occurring; everyone from scientists to school children are mobilizing to do something about carbon emissions. And the most forward-looking political leaders recognize that amplifying these grassroots energies could be our best short-term hope for meaningful action.

Already a leader in addressing climate change, the British Columbia government recently lit a fire under Canadian software developers by open sourcing hundreds of its best climate datasets and asking for innovative Web-based and mobile apps that could raise awareness of climate change and inspire action. As an incentive, the government put up $40,000 in prize money.

One of the winning apps allows helps students mange their carbon footprints. Users can track their bathing, eating, transportation and entertainment habits, and the app spits out an impact statement with annualized kg of CO2 equivalents generated. Another app aimed at small and medium size businesses, enables business owners to measure their company's emissions and then benchmark their score against peers in industry.

Executives with the B.C. Ministry of Citizen Services tell us that collaborations like these provide a low-cost way to tap new ideas and skills in pursuit of the government's climate goals. In fact, the initiative cost BC taxpayers very little. The government contributed its data. Private sector partners contributed the funds for the prize money. Software coders and local businesses provided their labor and ingenuity. And none of the initiatives spurred on by the contest require new rules or new legislation to move forward.

Should other governments be following BC's lead?

To be sure, most climate change experts generally agree that the surest way to accelerate action on climate change boils down to simple economics: if you want discourage carbon intensive activities, make pursuing them more expensive. Putting a price on carbon (through a cap and trade system or a straightforward carbon tax), for example, would help usher in a new mind-set among consumers, investors, farmers, innovators and entrepreneurs that in time will make a big difference. Make people and businesses pay the full environmental costs of what they produce and consume and suddenly every investment and purchasing decision made in retail stores, financial markets and small and large companies around the world would be made in pursuit of the least-cost low-carbon option.

Weaving carbon emissions into every business decisions would drive innovation and deployment of clean technologies to a whole new level, and make investments in energy efficiency much more attractive. Industries would need to invent and adopt new technologies that boost efficiency to limit their emissions. And consumers would curtail their own carbon footprints as the prices they pay for things like air travel and exotic fruits begin to reflect their true costs to the planet.

However, while it is true that centrally managed taxes, credits and incentives provide important levers for steering society toward low-carbon solutions, these are not the only levers. And while Congress is unlikely to take action, there is no shortage of valuable initiatives that can both help us better understand the causes and consequences of climate change and marshal the knowledge and talent required to advance sensible solutions. In fact, everyone - including climate skeptics - stands to benefit from initiatives that, like the BC apps contest, make information that was once inaccessible and hard to understand available to policymakers and the broader public.

Today, insufficient information about which economic activities--and, by extension, which communities, companies and nations--are contributing most to climate change undermines society's ability to target remedial actions and assign responsibility for correcting damaging behaviors. The right amount of transparency in such cases can change perceptions, reveal new factors that alter the stakes, or compel other participants to accept the need for and legitimacy of new regulations.

Getting our hands on comparable CO2 emission data for all industrial facilities and other human activities such as logging, fishing or mining, would be a goldmine for scientists, policy-makers, environmentalists, investors and ordinary citizens. Even better would be the ability to measure the impact of those activities on our climate in the same way companies apply financial metrics to their investment decisions to understand the bottom line impact.

We're not there yet. But over the past few years, a cornucopia of initiatives has emerged to make climate change information more accessible to the public and key institutions, including the investment community, regulators, and government purchasing organizations. Whether mapping the world's oil spills, simulating the effects of sea-level rises, tracking mammals on the verge of extinction or showing national per capita CO₂ emissions, the initiatives tend to emphasize the use of bold visual formats help communicate complex phenomena in a way that both scientists and laymen can easily grasp.

Carbon Monitoring for Action (CARMA), for example, maps the CO2 emissions of over 50,000 power plants and 4,000 power companies across the world. The data for current and planned installations is easily accessible through a Google Map on the project's website as well as through an API. "Our role is to translate" says CARMA's lead researcher, David Wheeler. "We take reams of data which are available out there and translate them into an easily accessible format. There are few other institutions that have the incentive to do this - most scientists don't as it doesn't affect their publication records, and policy people are either too busy or not sufficiently technical to do the work." CARMA's work is particularly important as the energy sector is the single largest contributor of greenhouse gas emissions, at around 65% of the world total.

The power of the platform became apparent one day when Wheeler received a call from a friend at the World Bank inquiring about a plant being built in Mmamabula, Botswana. It turned out that the installation would be a major polluter, which piqued Wheeler's interest - what else is the World Bank funding? Scrolling over to India he found plans for another coal plant, the Tata Ultra Mega, which ultimately would become one of the biggest emitters of CO2 in the world. Wheeler's finding led to a large campaign by the not-for-profit Environmental Defense Fund to institute stricter standards at the World Bank. The following year new legislation was put in place to limit the types of projects that would be eligible for funding.

The Carbon Disclosure Project (CDP) targets people with lots of money and enormous influence on the companies in which they invest. Institutional investors--the big mutual and pension funds--are a critical audience in the effort to accelerate business action on climate change. After all, they pretty much own the economy. Paul Dickinson, the organization's founder, has calculated that access to capital will become a powerful lever for encouraging companies to reduce carbon once a critical mass of investors and lenders starts attaching risk premiums to companies with climate liabilities and those without sound carbon management plans. The CDP aims to speed the transition by helping the investment community better understand how companies are positioned in relation to the risks and commercial opportunities associated with the transition to a low-carbon economy.

CDP's analysis is based on information it receives from some 2500 private and public organizations, including many of the largest corporations in the world. Less altruistic operators might have chosen to keep the data proprietary and make money by selling access to institutional subscribers. But Dickson thinks the public value of exposing the data to a broader audience exceeds the commercial potential. "Our goal is to apply the intelligence of the world to the climate change problem. Anyone that wants to look at the data can go to the website and download it."

Scientists are getting on board too. Greg Asner and Carlos Souza, two scientists at the forefront of forest science, are now working with Google to gather petabytes of historical and present satellite imagery. This information will help uncover the location and rates of deforestation around the world and allow colleagues to pitch in on research that will determine the links with climate change.

The evidence accumulated to date is already having an impact. We now know, for example, that emissions from tropical deforestation are comparable to the emissions of all of the European Union, and greater than those of all the cars, trucks, planes, ships and trains on the planet. And thanks to the work of economists such as Nicholas Stern, we also know that protecting the world's standing forests is one of the most cost-effective ways to cut carbon emissions and mitigate climate change.

Of course climate deniers, and those who see the world's attempt to control climate change as a threat to their business interests, aren't necessarily interested in the truth. They will continue to unleash their armies of lobbyists to water down policy, spread bogus science, and block innovations that might threaten their business models. But the best way to counter back-room lobbying and misinformation is not to hunker down as some climate scientists have in the wake of the climategate scandal, but to foster greater transparency and open debate around the risks of not acting now.

Tim Palmer, a climate scientist at the University of Oxford whose current work focuses on quantifying and managing the uncertainties surrounding climate change, suggests that everyone concerned by the climate change issue, particularly those who are skeptical, ask themselves exactly how large the probability of serious climate change should be before we should start cutting emissions? 0.1%, 1%, 10%, 50%? "Considered this way," says Palmer "it's clear that the black and white dichotomy between the 'climate believers' versus 'climate skeptics' is indeed a false one."4 And if you happen to be one of those people who believe that action is merited today, there is no point waiting for the political gridlock gripping the country to recede. Thanks to Web, we have the most powerful platform ever for people to learn about climate change, inform others and self-organize.